Pacific Oil Case Assessment Negotiating is the art of managing power. "A negotiator’s power may be critical for the quality of his or her success…" (Kim, Pinkley, & Fragale, 2005, p. 799). There are various sources of power as well as various way to control power and its impact in negotiations. In the case of Pacific Oil's negation with its long time Reliant customer, power was significantly unbalanced to the disadvantage of Pacific Oil and its negotiators. This resulted in Pacific Oil making numerous concessions to the advantage of Reliant. However, there were many actions which Pacific Oil could have taken to balance the playing field in their negotiations, but would have required strategic planning far in advance. Pacific Oil failed …show more content…
They represent Pacific Oil in one location, while decision impacting their negotiations are being made in another location, such as the decision to manufacture, or not manufacture, PVC. Fontaine and Gaudin might have engage in some of the decision making processes taking place within Pacific Oil. Another disadvantage for Fontaine and Gaudin was their negotiating locations. Their concern for time prevented them from setting up negotiations where they may have gained some power from perception in their own corporate environment. There were a number of ways for Pacific Oil to address the issue of their power imbalance with …show more content…
In other words, Reliant was a major customer. Perhaps if Pacific Oil focused on increasing their smaller business relationships would prevent them from large losses in negotiating. Then, Pacific Oil's decision to not proceed with manufacturing their own PVC might not have been a very good decision. If the decision was made because it was determine not to be lucrative, maybe all avenues were not addressed, such as outsourcing. This could have given Pacific Oil the power of competition. If they would have proceeded with the manufacturing venture, they would be less dependent on Reliant as a customer. The power advantage would then shift from Reliant to Pacific Oil. Pacific Oil could also approach the various competition to get an advantage over Reliant's threat to take their business somewhere else. Pacific Oil also could have gained some advantage by encouraging Reliant to address all of their issues up front by asking more questions about their concerns (Lewicki, Saunders & Barry, 2011). Finally, conducting all of the negotiations away from Pacific Oil's main office diminished some of their power. Having some higher leadership more engaged in the negotiating process could have diminished some of Reliant's power advantage through perception. Reliant was in a position to demand more
Oil policies went deep into the personalities and early experiences of Rockefeller and his colleagues. They had heightened uncertainty and speculation about their activities by their secrecy in building the alliance and by their evasive and legal testimony on the witness stand. There tended to be aroused antagonism because the very
The key takeaways from this case are the importance of having a decision making process in place, as well as not relying on bias to fix a situation. There should have been policies and procedures in place so that when disaster strikes there are guidelines to follow. The model for rational decision making could have been followed. The problem should have been identified, general alternative solutions should have been discussed, evaluate alternatives and select a solutions, and then finally implement and evaluate the solution that was chosen. Had BP and Transocean had effective communication the oil rig may not have caused such a disaster (Kreitner & Kinicki, 2013).
The Standard Oil Trust of Ohio was and American oil producing, refining, and transporting company. It was founded in 1863 by John D. Rockefeller and lasted until 1911. During 1868, Rockefeller expanded the oil company to become the largest oil refining company in the world. In 1870, the company was renamed Standard Oil Company. After it was renamed, Rockefeller purchased most of the oil companies that were currently in business to make one large company.
It would seem that the types of negotiators each of our characters took on also had a fair part in the way the negotiations played out. Bhand (2010) discusses the four types of negotiators. I don’t believe we see all four of the negotiation types displayed in this negotiation, but rather that Fontaine and Gaudin share the same negotiation technique while Hauptmann, and Zinnser take on very different methods to the negotiating. Let’s start with Fontaine and Gaudin. From the first visit between Gaudin and Hauptmann in December to the combined visit of Fontaine and Gaudin in March, Lewiski (n.d.) points out the factors of the established relationship between Pacific Oil and Reliant Chemical, and the thought of Fontaine and Gaudin that the negotiations will be without any real problems. This thought process, and the way it continues to drive the negotiation going forward falls into Bhand’s definition of a negotiator low on task orientation but high on relationship orientation. “They have a mindset that if the relationship with the other negotiator is ‘good’ then it will be easy to negotiate…rarely disagreeing with the other party, they want to please the other party by agreeing to most demands” (2010). This behavior is displayed over and over again with Fontaine and Gaudin in that they do not disagree with any of the Reliant Chemical demands outright, but rather they
In essence to the response of this question tying in how Standard Oil had changed society with references to the levels and spheres of corporate power discusses in the chapter, I would say that the power of economic, cultural and political of the Standard Oil has led to the big changes to the society. Based on the text book mentioned that “Rockefeller’s company was capitalized at 70$ million and produced 90 percent of the nation’s refining output.” This has shown how strong the economic power of Standard Oil is. The Standard Oil Company built the facilities, employ workers.
There are two major barriers that are leading to an inevitable failure in the Royal Biscuit and Edeling merger. The first, and most important, is the lack of cultural competency between Brighton and Wallach, the two merger officiators. Both parties are displaying characteristics of ethnocentrism and misperception. Second, is the lack of corporate competency resulting from dissimilar corporate cultures, histories and business strategies. If the merger of the two companies is to be successful then corporate synergy must be realized; otherwise the union is doomed to failure.
Canada has always had extensive deposits of oil sands, and has been a fascination to the explorers and settlers of earliest Canada, when Europeans saw how First Nations people used it to water proof their birch bark canoes. That being said, the majority of oil sands in Canada are contained in Alberta. Alberta’s oil reserves play an important role in the Canadian and global economy, supplying stable, reliable energy to the world. Alberta 's oil sands have been described by Time Magazine as "Canada 's greatest buried energy treasure." (Alberta) Oil sand is a naturally occurring mixture of sand, clay or other minerals, water and bitumen, which is a heavy and extremely viscous oil that must be treated before it can be used by refineries to
Looking at the parties involved in the negotiation, it was clear that each party would have agendas that would be in conflict with each other. For instance, the other ports in the region would like the highest compensation possible while Harborco would like the lowest compensation. Additionally, each party would also have a minimum threshold score that they would need from each outcome before they would support the project. Therefore, it is clear that this is an integrative negotiation which requires joint problem solving to achieve
Valuation is the estimation of an asset’s value, whether real or financial, based on variables perceived to be related to future investment returns, on comparison with similar assets, or, when relevant, on estimates of immediate liquidation proceeds (Pinto, Henry, Robinson, Stowe; 2010). Correct valuation of real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise. This case attempts to tackle two approaches in real asset valuation: Discounted Cash Flow (DCF) analysis and the issues surrounding such, as well as the Black-Scholes Model for Real Options. Questions to be addressed in the study are:
The British Petroleum (BP) Oil Spill occurred in April of 2010 and hurt many people, animals, businesses, and the economy of the many cities it impacted. It is recognized as the “worst oil spill” in the history of the United States, killing eleven people. The spill occurred due to a leak in a pipe that spilled oil into the Gulf of Mexico. The BP Oil well was not capped until 87 days later, by which 3.19 million barrels of oil had already spilled into the the Gulf of Mexico. The BP Oil spill did not only impact humans but sea animals too, including shrimp, lobsters, dolphins, turtles, and more. To clean up the spill, more chemicals were dumped into the ocean to reduce the size of the oil droplets causing the chemicals to also enter the food chain of these sea creatures as well. Over one thousand miles of the Gulf of Mexico shoreline was affected by the British Petroleum oil spill. But while the BP oil spill caused many damages to the Gulf of Mexico, it also brought some benefits, including jobs for immigrants and the national economic financial crisis started to withdraw.
Customer’s bargaining power: The bargaining power of customers is medium. There a huge number of customers, not well organized to defend their interests. Additionally, the
Standard Oil began as an Ohio partnership incorporated in 1870 by John D. Rockefeller. Using innovative business tactics, it absorbed or destroyed most of its competition in Cleveland in less than two months.
The oil industry can not be discussed without mentioning the name John D. Rockefeller. Rockefeller changed the business of oil distribution. In the 19th century Rockefeller began his humble beginnings with a small investment, along with two other partners, in the oil refining business. Eventually Rockefeller upset at the direction of the company bought out his partners. He was now buying into refining and developing kerosene and other petroleum-based products. He later named this company The Standard Oil Company which by 1872 nearly owned all the oil refineries in Cleveland. In 1882, Rockefeller took all his holdings and merged them into the Standard Oil Trust. Through smart business
British petroleum (BP) is one of the seven super major oil company in the world. BP are the fourth largest gas and oil company in the world. BP has a hand in every aspect of the oil business from exploring for new oil to marketing and distribution. BP originally started as the Anglo-Persian Oil Company in 1908, established as a subsidiary of Burmah Oil Company. The Burmah Oil Company. Would capitalize on discoveries they made in Iran and the middle east. The company would take its current name as British a petroleum in 1954. The company slowly started to expand from their roots in the middle east. BP chose to expand to Alaska in 1965. BP would continue their expansion in America when the gain the majority control of Standard Oil of Ohio in 1978. Also during the time BP would continue their ongoing exploration for new sources of oil. They became the first company to strike oil in the North Sea. The British government gradually privatized Standard Oil of Ohio for 1978-1987. In the last half of the 20th and the beginning of the 21st century BP took two major steps to expand their company. BP first major expansion occurred when they partnered with Amoco during this time they also acquired and absorbed Burmah Castrol in 2000. Also for 2003 to 2013 BP had a joint partnership with the oil company TNK of Russia. BP tireless effort towards expansion have made them highly successful and one of the top four oil and gas companies in the world. BP turned a profit of 6.48 billon U.S.
Identify the strengths and weaknesses of Fontaine's and Gaudin's negotiating strategy in their deliberations with Reliant Chemical Company. How effectively did Fontaine and Gaudin approach the negotiation?